Sensible outcome – inexplicable decisions

O’Dea v Rutten serves as reminder of the importance of respecting the legal framework of estates and trusts.

For reasons that make no legal sense notwithstanding wills that provided for the residue of two estates to be distributed to trusts, the executors took the position that the trusts should be wound up and the trust funds paid to the settlors’ respective estates.

As noted by Associate Judge Johnston at [7]:

With respect to the advice given the Court noted that:

Essentially the Court sanctioned the use of the rule in Saunders v Vautier to remedy the breach (although it is observed that while the Court respected the pragmatic outcome there was a mix of dismay and despair regarding the events that lead to the proceedings).

It is useful to note that notwithstanding the statutory form of the rule in Saunders v Vautier provided in the Trusts Act 2019, the rule continues outside the legislation.

References:

• O’Dea v Rutten [2021] NZHC 2407
• Saunders v Vautier (1841) 4 Beav 115, 49 ER 282
• Trusts Act 2019